Companies' registrations rose 68% since new law took effect.
The growth follows the implementation of a new Companies Law 20 months prior, with nearly 400,000 registrations by Q3 2024.
The Ministry of Commerce has announced a 68% increase in commercial registrations since the implementation of the new Companies Law in Saudi Arabia. The law, which came into effect on January 19th, 2023, has been credited with driving growth in company registrations, with the total number reaching 389,413 by the end of Q3 2024. This is up from 230,762 registrations prior to the law’s enactment.
The new law has introduced a range of measures designed to simplify business processes, stimulate entrepreneurship, and make it easier to establish and manage companies of all sizes. Key provisions include relaxed regulations for company formation, enhanced procedures for ownership and shares, and the creation of new company structures, such as the simplified joint-stock company, which is particularly tailored for startups and entrepreneurs.
One of the law's major initiatives was to ease the formation of different company types, including non-profit organizations, and to provide more flexibility for entrepreneurs. Among the changes, business owners can now transform sole proprietorships into more complex company forms, facilitate company mergers and divisions, and issue shares or other financing instruments through limited liability companies. Additionally, micro and small businesses are exempt from mandatory auditing requirements, streamlining their operations.
Another notable feature is the law’s expansion of electronic services, allowing for remote participation in general assemblies and voting on company decisions. These digital provisions are aimed at improving corporate governance and increasing accessibility for stakeholders.
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